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Oct. 11, 2022

Jeremy Hill- How Making Connections Can Signify Success

Jeremy Hill- How Making Connections Can Signify Success
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My guest today is Jeremy Hill, a successful entrepreneur and founder of JB Capital. In our conversations today, we discuss what success looks like and how one person's path to success may differ from another. We discuss how the ways we make connections today differ significantly from our grandparents' generations and the importance of a good connection in the business world. 

Please enjoy my conversation with Jeremy Hill.

For full show notes, transcript, and links to content discussed in this episode refer to the episode page here:


For more episodes of Compound Ideas, visit Compoundideasshow.com

For more insights like these and to contribute to the conversation go to: https://www.ridgewoodinvestments.com/insights-from-our-founder  

Follow Ken Majmudar on: 

Linkedin @kenmajmudar

Twitter @kmajmudar 

Facebook kaushal.majmudar.3




Show Notes

[00:02:28] - Learning to adapt to a vagrant childhood

[00:05:22] - How Jeremy’s grandparents shaped his perspective on life

[00:10:34] - The values and behaviors from past generations

[00:12:20] - The “Stand By Me” moments of this generation

[00:15:41] - Why he never got his degree

[00:17:08] - What it means to be successful 

[00:21:30] - A really good employee who can’t keep a job

[00:25:31] - A friendly cup of coffee accidentally develops into new business opportunities  

[00:29:25] - Deep dive into JB Capital’s business structure and how it’s changed over the years.

[00:39:28] - General wisdom for entrepreneurship

[00:43:39] - Jeremy shares his perspective on the decline of the Emerald City 

[00:48:59] - Outlook on the oncoming recession.

[00:50:30] - Perspective on social media and using it to build a portfolio


Narrator: [00:00:04] Welcome to Compound Ideas, hosted by Ken Majumdar of Ridgewood Investments. This podcast will feature exceptional individuals to uncover deep insights into business, entrepreneurship, personal growth, investing and multidisciplinary thinking so that you can learn how to improve your finances, find better investments, and pursue authentic, lifelong growth, wisdom and happiness. Learn more and stay up to date at compoundideasshow.com.


Ken Majmudar: [00:00:35] Today we have founder and managing partner of JB Capital, Jeremy Hill, on the show. In our wide-ranging conversation, we talked about how Jeremy first learned to read people and the impact of his nomadic upbringing. We also talked about what success looks like to him and how as a young real estate agent, he lost a listing, but that opportunity turned into a deal to raise half a million dollars over a cup of coffee. We also discussed how he has learned over the years to focus on what he wants, but to be open to multiple paths to achieving his goals. Please enjoy my conversation with Jeremy Hill.


Ken Majmudar: [00:01:15] I'm pleased to have Jeremy Hill on the show today. Welcome, Jeremy.


Jeremy Hill: [00:01:19] Thanks. How are you? Happy to be here.


Ken Majmudar: [00:01:22] Yeah, I'm doing well. Thank you for making the time. And it's a pleasure to finally have a chance to sit down with you and talk to you at some length. So on the show, what we typically do is we want to cover not just our professional lives, but also, I love to find out about somebody's story and life arc, where they came from and where they've ended up now. And obviously, as part of that, there's usually a lot of learnings and a journey that we're usually able to touch on. So, for you Jeremy, tell us, where did you grow up? How did you grow up? What was that like?


Jeremy Hill: [00:01:55] I feel like I need to lay down on the couch like a box of tissues or something. Like it's like we're starting with Dr. Phil and then getting to it.


Ken Majmudar: [00:02:01] You'd be surprised though. It's like very rare. I don't know if you find this to be, but even all the people that I interact with in my life, I rarely know their backstory, their arc. It sometimes comes up by accident, but often it's never really discussed. And in this show, I mean, I don't know if you had a chance, but if you go back and listen to the people we've had, it's incredible the kind of diversity of experiences and some really like challenging things, tragic things, some uplifting things.


Jeremy Hill: [00:02:28] So, yes, happy to share. So I grew up born and raised in the South. Born and raised in Texas. Moved all over as a kid. Parents were separated when I was a kid, so my parents separated when I was two. I met my dad when I was 12. He died when I was 20. And so in the meantime, it's kind of single mom life. My mom was in the insurance business and so we moved around. So I went to first grade here and then I went to second and third grade here was kind of that kind of grow, almost like a military kind of growing up that you're always the new kid at the time. When you're a kid, you hate that. That sucks to always be the new kid in school and always have to make new friends and always have to find out who are the cool kids and which ones beat you up and all that kind of stuff. Looking back on it further, as an adult, I wouldn't have changed it for the world because the ease of being able to fit into different situations, to be able to meet people, to never meet a stranger, to be able to adapt, fit in, acquiesce, and then also in the meantime understand who the players are. That I think was learned early as a child because you're always trying to figure stuff out. So you hated it as a kid and now I wouldn't have traded it for the world. That was kind of the growing up-ish. So grew up in Texas, moved all over the place. My mom got remarried as a kid. We moved to Seattle, so I went to high school here, hated it. Went back to Texas for university.


Ken Majmudar: [00:03:42] You hated Seattle?


Jeremy Hill: [00:03:43] Well, I mean, I hated Seattle because it wasn't my choice. Hey, we're moving. Pack your shit. It was more so. I hated it because I didn't want to be here. It wasn't my choice. You're forced into things. Here's what it is that you're doing. I don't want to do that. Well tough. This is what we're doing. And so I didn't care for that. And so as soon as I had the opportunity to get out, I got out. Shortly after I graduated, I decided I wanted to go back to university in Texas. So I went back to university there, enjoyed that. Then between my junior and senior year of university, I came back one summer to see my friends and see my folks I met, who is now my wife, wonderful chick, and told her I was going to be rich and famous and good looking and stick with me, baby. It's going to be great.


Ken Majmudar: [00:04:21] And I assume you were none of those things. Maybe good looking.


[00:04:25] No. Still working on that stuff, right? Still waiting for my promises to come true.


Ken Majmudar: [00:04:30] Well, I could say you're a good looking. At least that one came true.


Jeremy Hill: [00:04:33] All right, I like it.


Ken Majmudar: [00:04:34] Yeah.


Jeremy Hill: [00:04:36] So we have our 26th wedding anniversary next month.


Ken Majmudar: [00:04:40] Oh, wow. Yeah.


Jeremy Hill: [00:04:41] And so that is a beautiful, happy accident that I've certainly been blessed with.


Ken Majmudar: [00:04:46] Go back to what you were talking about. So you touched on it, you brought it up. So it must be important. Single mom in the insurance business, was she like a traveling insurance salesman or?


Jeremy Hill: [00:04:56] At the time when I was a kid, she worked for Aetna Insurance. And so she was a little. Manager gal kind of a thing. And so the insurance business was growing at a time. So we'd go in and we'd live in Lubbock for two years and she'd get set up and hire everybody and get stuff stabilized. Okay, That's great. Now we're going to Midland. We live in Midland for two years, and then she'd say, Okay, great, now we're moving to Dallas. And it was that kind of a thing.


Ken Majmudar: [00:05:18] But always in Texas, pretty much.


Jeremy Hill: [00:05:20] Always in Texas as a kid. And then when I was 12, my mom decided she wanted to go back to law school. She went back to school in Oklahoma, and then she spent a year abroad at Oxford, then came back and wow, that whole three years before going to law school, I live with my grandparents, so super close with them. My grandparents are totally cool. And so as a kid, I grew up listening to Tony Bennett and Frank Sinatra and Dean Martin and all this other kind of stuff so I make.


Ken Majmudar: [00:05:43] Your grandparent's music basically. Yeah.


Jeremy Hill: [00:05:46] Yeah. I mean, like when I first started dating my wife, she was like, How old are you?


Ken Majmudar: [00:05:49] Yeah. Based on your musical taste, you're pretty geriatric, I guess.


Jeremy Hill: [00:05:54] Exactly. I'm pretty geriatric, right? I've got an AARP card, and I'm the oldest 45-year-old guy, you know, so all of us are grandparents or the generation above our parents has a different perspective.


Ken Majmudar: [00:06:06] That's, by the way, the greatest generation, the guys that fought the war.


Jeremy Hill: [00:06:09] Absolutely. And just their perspective on money versus friendships and raising a family and business and all these kinds of things like that. Our parents or my parents anyways, at least they didn't have that. I think one of the biggest benefits of my childhood growing up was really that time and the influence it is that my grandparents had me. Because I look at the world different than 90% of the people that is that I know. I honestly get along better with people that are 20, 25 years older than me.


Ken Majmudar: [00:06:39] So if you were to distill it down and I want to combine the two threads that we talked about that growing up in a single mom household that's constantly moving around. Oh, and before we get to that, actually, one other thing I just cut out of curiosity, because I haven't spent a lot of time in Texas. You saw a lot of Texas, obviously at a different era. If there was one place that you would have been like, I just want to put my roots down here of all of those places, which one would you have picked?


Jeremy Hill: [00:07:03] I mean, really, none. Texas has no appeal to me anymore.


Ken Majmudar: [00:07:06] Oh okay, interesting.


Jeremy Hill: [00:07:08] But I mean, if I had to go, I would imagine it would be in the Dallas area somewhere. I haven't been back in a while. So my perspective is dated.


Ken Majmudar: [00:07:16] No, but I'm not saying you now. I'm saying you as a kid who was moving around and like, I don't want to move all these times. Let me just sit over here like, mom, let's just put roots down here. Which one as a kid would you have picked?


Jeremy Hill: [00:07:28] As a kid, where I picked, I would have picked Lubbock because that's where my grandparents were. And my grandparent's legacy, friends and families, that's where I would have been.


Ken Majmudar: [00:07:36] That's what you would have picked. Okay, got it. Got it.


Jeremy Hill: [00:07:38] As a kid, that's what I would have chosen.


Ken Majmudar: [00:07:40] And now to go back to what I was about to ask you, so if we combine the fact that you had this unique upbringing as a child, and then you said, hey, I relate more to people that are 25 years my senior. If you distill down from those experiences of Jeremy Hill's kind of operating philosophy that came from those formative experiences and both that's from your grandparents and from your experience as a child growing up with that kind of an unusual situation as also a child of a single mom, can you bring it down to a handful of principles that describe your outlook that you got from these different threads?


Jeremy Hill: [00:08:16] Sure. So I think the couple of things that come out of that, number one, is a degree of self-reliance, single parent, household parent, whoever the parent is, mom or dad is gone a lot. So guess what? You make your own breakfast, you make your own lunch, you put yourself to bed. You are responsible for getting yourself back and forth to school. So I think that there's a degree of self-reliance that is formed unconsciously in that period of time that pays dividends long term. In my organization now, the people that report to me fight to take things off my plate because I'm just used to doing all the shit by myself. I think that comes out of that time. The other thing that came out of that time that was hugely beneficial is again, this opportunity. It is that I'm never a stranger in any city, easy to meet people, easy to connect, easy to dissect and distinguish between who's good and bad and those kinds of things. I think that came from that time. Those are huge benefits and life lessons. It as it came from me. I think the other thing too is that there is a wisdom that comes from hanging out with your grandparents. That's a void that is in my life now, because my grandkids are past. That age of characters and values has not been replicated or has been watered down since the idea of your word is your bond and a handshake means something. And, you know, a character is built over a lifetime that can be erased in a day. They don't think about that stuff too much anymore. Right.


Ken Majmudar: [00:09:36] Who's they?


Ken Majmudar: [00:09:38] The they that don't really think about that, or you don't see it as much.


Jeremy Hill: [00:09:43] Well, it's that that that perspective and and thought process today does not. Does not seem as consistent, right? Like.


Ken Majmudar: [00:09:56] It's not as prevalent maybe as it was.


Jeremy Hill: [00:09:58] It's not, it's true. Great. Well said. Like it is. When I was growing up as a kid, it was normal. If I was walking you know, into a restaurant, into a hotel, into a you know, a building of whatever kind it is for whoever is walking in front of you to stop and hold the door for you or hold the door for my mom or my grandparents. That's why we would do the same. Now somebody holds the door for you. You're like, Oh, my God!


Ken Majmudar: [00:10:18] I do it all the time.


Jeremy Hill: [00:10:19] Me, too. Totally. Me too. But when you do that, the acknowledgment from other people is, oh, God. Hey, thanks. That used to be just normal. It's less normal now. And that to me is missed.


Ken Majmudar: [00:10:34] Give me the other examples of, say, values or behaviors in your grandparent's generation that you adopted that maybe you wish were more prevalent in people your age or younger even.


Jeremy Hill: [00:10:45] I think my grandparents were an anomaly, like the friendships that they had, and maybe it's because of post-World War Two type thing. And so the husbands and wives that came out of that had something in common and they grew up together and were friends for 50 years and their kids grew up together and their kids were together for 50 years and their grandkids or great-grand, like it was. It doesn't seem like that as much anymore. Maybe it's because people in jobs and things like that are more portable. Not a lot of people are like, okay, I'm going to buy this house and I'm gonna live there for the next thousand years till I die. That was definitely more back then. I'm going to buy a house. Why do I need another house? You know, right? Why would I move? I'm here. Maybe that's part of that, I think that degree of relationships value in the community I think is gone as much or I'm not seeing it as much. And maybe that's just my own experience in Seattle, where it is that I'm at, and it happens more often across the country, but I don't see that as much as I did 20, 25 years ago.


Ken Majmudar: [00:11:39] Do you think it's gone forever or are there things we can do to bring it back?


Jeremy Hill: [00:11:43] There's always things that you can do to change it, but change happens when it becomes important enough to enough people. I don't know if it's important enough to enough people.


Ken Majmudar: [00:11:52] In fact, you could probably say that technology and social media and stuff have even further fragmented it. Among young people, there's a tremendous amount of in a world which is more connected than ever, there's a lot of disconnection.


Jeremy Hill: [00:12:03] Totally agree. Yep.


Ken Majmudar: [00:12:05] It's kind of sad that generation didn't get to experience the same level of community and bonds that we did of people caring for each other.


Jeremy Hill: [00:12:13] Yeah, they're doing it, but it's different.


Ken Majmudar: [00:12:16] Oh, absolutely. I'm not saying that they're any different personality wise. Yeah.


Jeremy Hill: [00:12:20] Yeah. Like my youngest when he's playing games and stuff like that. So he's on an elite traveling soccer team. And so. 15, 16 kids on the team are all like the posse. They probably have, like, secret tattoos or something, but when they're not playing games or they're not playing soccer or traveling together in a hotel or doing whatever, they're all five of them get together and they'll play some game online and they're all together and they're all talking and they're talking smack about it at practice. And that's their stand by me walking on the railroad tracks of talking to each other. And that's maybe kind of the same of you and I like, okay, we're going to ride our bikes and meet at so-and-so's house and we're going to be there screwing around all day until the lights come on and we got to go home for dinner. I mean, it's kind of the same but kind of different. And I don't know if we romanticize our childhood being fantastic because of that. And so when we romanticize ours, we castigate others.


Ken Majmudar: [00:13:13] Yeah, I'm not. I don't at least in my case, I don't romanticize it as much. I grew up in the eighties. That was my high school years. And there's that show Stranger Things now and if you ever seen it, it's quite entertaining.


Jeremy Hill: [00:13:24] My daughter watches it. I haven't seen it.


Ken Majmudar: [00:13:25] It's literally like that's how I grew up. Minus all the magical stuff.


Jeremy Hill: [00:13:29] Right, exactly.


Ken Majmudar: [00:13:30] Magic. No magical and supernatural things were happening to me. Unfortunately, that makes it a lot more dramatic and interesting. But, you know, I'm not so much romanticizing it, but I do think that that's probably a topic for another day. There's a great guy. Johann Hari wrote a great book about anxiety, depression and also drug abuse. And the rates of these things have gone way up every decade, like the last X number of decades that I've been alive. And it has something to do. And it's not just technology, but it's just one part of it that there's more and more disconnection in so many different ways. We're basically an animal, a human animal that has certain needs. So these are signs that people's needs are not being met. They don't really know that, that these are warning signs to do something different. People don't really interpret it that way. Then a lot of times it's just medication or whatever.


Jeremy Hill: [00:14:20] Yeah, I can get beyond that.


Ken Majmudar: [00:14:22] Anyway, so going back to it then. So only child, single mom, obviously you were very close with your grandparents. How about your mom and then your dad eventually?


Jeremy Hill: [00:14:30] Yeah, I mean, touch and go.


Ken Majmudar: [00:14:31] Was that formative for you, that relationship as well? In a different way?


Jeremy Hill: [00:14:34] I'm sure. Oftentimes I'm so busy, I don't stop to think about it. Like today's Friday, if you ask me what I had for breakfast on Tuesday, I probably wouldn't remember.


Ken Majmudar: [00:14:43] Yeah, I know. It's hard to remember. Yeah.


Jeremy Hill: [00:14:45] I can think of, rationalize it and kind of see it in my head more so for the shaping size of my grandparents from a positive way from mom is probably different. I mean, there's probably some positive in there, but mostly what I want to grow up and not do. Same thing for Dad. Dad was wonderful guy and figured out a way to consistently make poor decisions. So everything is an opportunity to learn what to do or not to do. Either way.


Ken Majmudar: [00:15:09] Yeah, you can model what to do and you can model what not to do. Absolutely. I don't know that enough people always are conscious enough to do that.


Jeremy Hill: [00:15:18] Agreed.


Ken Majmudar: [00:15:18] It's very easy to kind of get into a spiral of negativity around what you don't want or what you're fighting against, but then not see the, hey, this is a roadmap of what to avoid and I can make decisions differently. So that's trying to put a positive out of a negative can happen. Where did you go to college and what you study?


Jeremy Hill: [00:15:35] Well, when my mom graduated law school, she got remarried. She and her husband moved up here. So I went to high school up here, went back to Texas for university. I went to Texas Tech. So in Lubbock went to Texas Tech for three years, between my junior and senior year, that's when I was back for the summer, met my wife, and so she came back with me for a couple of weeks.


Ken Majmudar: [00:15:51] And this would have been what year?


Jeremy Hill: [00:15:52] That would have been 95. She and I got married 18 months later in 96.


Ken Majmudar: [00:15:57] Mid nineties, okay.


Jeremy Hill: [00:15:58] Yeah, mid nineties. So I didn't finish school between my junior and senior year. So finished my junior year going into my senior year, two months into my senior year. She had already been back here. I was down there, decided I didn't want to be without her and she was more important to school. So I went talk to the dean of the university and said, I'm moving back to Seattle. He's like, You have like six months left dude. And I'm like, Yeah, I'm leaving today. He's like, Whoa, still, man. So he said, Hey, I'll make you a deal study for 30 days. If you can pass the entire semester in 30 days, I'll write you a note. Excuse you for school, give you full credit for the semester and you can go on, do what you want to do. Okay Great! Do it. So I studied for 30 days, passed the semester, all my classes in 30 days, put all my stuff on a railroad car.


Ken Majmudar: [00:16:37] And what was your major at that point?


Jeremy Hill: [00:16:39] My major at the time when I started was biology. I thought I wanted to be a doctor and I definitely have rationale and reason behind that. I ultimately did not want to be a doctor, but I liked a lot of the things it is that I thought a doctor was. I wanted to be a doctor because I me personally, I love medicine, I love science, I love people and Discovery Channel binge watch like anything that's I just love all of that kind of stuff. The formative aspects of it is when I was growing up, any time it is that I was out with my parents or my grandparents, we'd be out to dinner and my grandparents would see so-and-so over there. Yeah, he's a great guy. Whatever. Played golf, he's a doctor. Oh, okay, cool. Whatever. We drive and go look at cars or houses after church on Sunday and we'd drive through this neighborhood. Yeah, that's so-and-so's house. Yeah, he's a doctor in town.


Ken Majmudar: [00:17:29] I mean, no question. The doctors were very respected.


Jeremy Hill: [00:17:32] I mean, you had respect. Someone said, Oh, the pretty daughter that you're playing tennis with at the club.


Ken Majmudar: [00:17:36] Doctor's daughter.


Jeremy Hill: [00:17:37] Yeah, exactly. Dad's a doctor. And I'm like, okay, well, I don't know if I want to be a doctor, but I want people to talk about me the way that my parents and people are talking about the doctor. I want to have a nice house, a hot wife, play golf, make some money. You have a nice car? Yeah, doctor. Sounds good. Sign me up for work.


Ken Majmudar: [00:17:53] Right? Right.


Jeremy Hill: [00:17:56] And I didn't want to be a doctor, didn't want to deal with the politics and the bullshit and the insurance and the being in school for ten years and didn't want to do that. I just wanted to have a nice house and a hot wife and a nice car, make money, have people respect me and all that kind of thing. And if that's a doctor, cool. So I'm up for that. Ultimately, as I decided to come back to Seattle, I came back to Seattle. I left school.


Ken Majmudar: [00:18:17] So you left school with one semester to go, so you never got a degree.


Jeremy Hill: [00:18:22] Nope.


Ken Majmudar: [00:18:22] Okay. Got it.


Jeremy Hill: [00:18:23] Didn't tell my parents or my grandparents that I left school, put all my stuff on a railroad. Didn't tell my wife, who's now my wife. I called her from Phoenix from a payphone and I said, Do you love me? She said, well Yeah. I said, I'm coming to Seattle. We're getting married. She's like, What? Where are you? I'm in Phoenix. What are you in Phoenix for? I told her, Here's the deal I tested out of school. Here's the deal, blah, blah, blah. All my stuff's on a railroad on the way up here. I'm at a payphone outside Motel 6 in Phoenix, and she's like, What? She goes, Oh, your parents are going to fucking kill you. Three or four days later, my parents or grandparents had showed up to my apartment, my roommates were there and Jeremy left, he's in Seattle and they're like, what? So I mean, my story is definitely different than most people.


Ken Majmudar: [00:19:03] Your parents, meaning your mom or your mom and dad.


Jeremy Hill: [00:19:05] My mom, my father had already passed.


Ken Majmudar: [00:19:08] Oh, he did. Okay. So then what happened after that?


Jeremy Hill: [00:19:11] So came up to Seattle and got married about 18 months later. We were young and broke and dumb and stupid and trying to figure out how to pay bills and you know, what the hell are we were we going to do, right? So I lived with her parents for about a month until we got our own place and then we're up and running. We're working two or three jobs trying to figure stuff out.


Ken Majmudar: [00:19:29] So you were both in your mid twenties maybe, or something like that?


Jeremy Hill: [00:19:31] Oh no. Early twenties. We got married. I was 21. She was 20.


Ken Majmudar: [00:19:35] Oh, wow. Yeah. Okay, so you're just doing like various.


Jeremy Hill: [00:19:39] Anything doing construction, sales, jobs, all sorts of stuff.


Ken Majmudar: [00:19:43] Okay. So let's fast forward then like get us from there to here.


Jeremy Hill: [00:19:46] So there to here, ended up starting a company. It is called Northwest Wireless. It's called a master agent. You're an unemployed sales force for Air Touch at the time, which is now a version for VoiceStream. Which is now T-Mobile. That's 1000 years ago. Right. And so it was me and a partner, two of us. And then it was five of us, and then it was ten of us.


Ken Majmudar: [00:20:05] What year would that have been?


Jeremy Hill: [00:20:07] That would have been 95, 96, 97-ish, right around there.


Ken Majmudar: [00:20:11] Oh, really? So still in your low twenties?


Jeremy Hill: [00:20:14] Yeah I was 21. I mean, it was new, young, drunk, stupid.


Ken Majmudar: [00:20:17] So wait, you're doing all these extra jobs. How do you go from that to like, hey, I'm going to be a sales rep, essentially with my old company, with my partner.


Jeremy Hill: [00:20:24] I mean, it was no different at the time than being a real estate agent or a mortgage broker. You figure it out.


Ken Majmudar: [00:20:29] It's like a thing people were doing and you could sign up.


Jeremy Hill: [00:20:32] It was a thing people were doing and we built a company around that company became the largest master agent in the Pacific Northwest.


Ken Majmudar: [00:20:39] Oh okay, so how many people did you have?


Jeremy Hill: [00:20:41] 60, 70-ish.


Ken Majmudar: [00:20:43] Okay. So you're signing up people for wireless subscriptions, basically.


Jeremy Hill: [00:20:46] Right. So but rather than selling your mom at the mall our clients were Bank of America.


Ken Majmudar: [00:20:51] Oh, you're doing corporate B to B cells.


Jeremy Hill: [00:20:54] Totally. It was C first at the time became Bank of America. We did Boeing, we did PCL. We did guys that had large, distributed workforce that wasn't, Hey, great, I'll take five phones. It was great. I'll take 50 or 250. And so it was a very hero to zero business, made a lot of money as a young, stupid kid, didn't know what to do with it, had no leadership, no mentorship, no nothing. It wasn't something, ultimately that you were building that was scalable or sellable. We could have been, should have been much smarter about how we did the business but didn't know any different.


Ken Majmudar: [00:21:23] What years were you in that business from mid nineties to when.


Jeremy Hill: [00:21:26] I was there? Maybe three years. And then I sold my interest to my partner because my wife got pregnant and so I was like, Shit, I'm going to be a dad, I need to be responsible. I should probably get health insurance, probably should wear a tie to work, and I should get one of those little badges on my belt loop that has my name on it and gets me into the building. Grow up time. I think between 97, 98 and 2001 or so, that kind of three or four years I got 13 jobs. And it wasn't that I was a crummy employee. I was a really good employee. I come early, I stay late, I work hard, I perform, I work, weekends, I work. I've got no problem with any of that. My issue was, is that I don't play politics, ever. If you're an idiot, you're an idiot. Doesn't matter what letters are behind your name and I'm not good at bullshit. You find that very little people at the time, in my experience, knew how to deal with that or manage that. Like if my boss asked me, in my opinion, I'd tell him my opinion. Even if it conflicted with his even my opinion was, Hey, you're a fucking moron. I think you're doing it wrong. And here's why.


Ken Majmudar: [00:22:25] You still do that. Or have you learned not to, maybe?


Jeremy Hill: [00:22:27] Yeah.


Ken Majmudar: [00:22:28] Yeah, okay.


Jeremy Hill: [00:22:28] Absolutely. I've certainly refined that to have the approach be a little bit more thoughtful. But people think honesty sometimes is cruel because it has the opportunity to hurt somebody's feelings. Honesty, if it's done with the right heart, is the best thing you can do for somebody. If you and I are 20-year friends and you're telling me this, that and the other thing and me having a degree of delusion and not being honest with you is doing you a disservice. And I would not be your friend or your boss or your mentor or your husband or your father. I would not be doing a good job of that if I didn't care for you enough, to be honest with you, even if being honest with you means Ken, you're doing a shitty job or whatever x, y, z. So I've certainly gotten better at that, but I've certainly gotten better at that. That leads you to a world to where it is that you only fit within certain organizations. And I've found that the best place for me to recognize the most benefit of that and to be able to do what I want to do. The way that I do it is by being self-employed, it's by having my own business.


Ken Majmudar: [00:23:35] So you are an entrepreneur. I think it's hard to go from being an entrepreneur back to being an employee, I think in most cases.


Jeremy Hill: [00:23:41] Oh yeah, agreed. And that's what it is that I found, because once it is that I was an entrepreneur doing my own thing, running my own schedule, I don't need to be held accountable. I'm accountable to myself every day. My rationale for going and getting a job is that I felt like I should grow up, like I was trying better. I wanted to be a better husband, a more responsible husband, take care of my wife, be an example for my kids, part of the service and the example it is that you want to set that I want to do for my family is to make sure it is that you have a very good understanding of who it is that you are all the goods and all the bads that come with that. Me trying to go to work for ABC Company and fit in a box and say Yes sir and yes sir and work 8 to 5 and do all this kind of stuff and watch football on the weekends. That was not me. And the longer I tried to do that, the more it is, I was like the fly kind of beaten against the window. That's just can't figure out a way to get out and just irritating everybody in the room.


Ken Majmudar: [00:24:33] So what happened after that? You did all these jobs that didn't work out. So then what.


Jeremy Hill: [00:24:36] So in the early 2000, I got my real estate license because you didn't have to be that smart or that good looking to make money in real estate, which coincidentally are my two key two key credentials right now. Not that smart but good looking and got in the real estate business. Grew up, my grandfather was an architect. My dad was in the construction and construction equipment business. And so I've been on a job site had a hard hat, kick rocks for a long time. So I really enjoyed that. Six months within the real estate business, I was totally bored. I thought it was a stupid business and it's not a stupid business. It's a great business. It just was not the business for me. In Washington, there was 25,000 real estate agents or real estate brokers, same thing. And there's now there's 25,001 and everybody is smarter than the other guy. So for me, going back to that doctor thing, I wanted to do something that I felt was respected, that was unique, that people revered, that I could make money and I felt provided value. Being a real estate agent didn't check that. And so I got introduced to a developer one time. And so I go and I meet with this developer. The developer, his name is Jeff. And so I go up one hour north, 45 minutes north, go meet with this guy. And we're sitting down talking and he's telling me about what he's doing and I'm asking him questions. We're getting to know each other. And he tells me, we've got this project over here and we're going to do this, that and the other thing. But I think we're going to list with so-and-so and so that's great.


Jeremy Hill: [00:25:50] I'm sure they'll do a great job for you. I wasn't really interested in your listing, and he goes, Well then what are you here for? Well, Ken told me you're a great guy and I wanted to meet you, heard good things about you, I love meeting good people that are doing good things just so well. Now, I'm not here to hustle him. I'm not here to settling. I'm just getting to know you having a cup of coffee and he's well, shit, now we're friends. And so we just start talking and I start asking questions about his business and how it started and all those other kinds of things. And then we get back to this project and I said, Well, tell me about this deal you're doing. So we're doing this townhome project over here and here's what it is and so forth. And I'm like, Well, where does the money come from to do that? And he goes well this deal is going to be about $4 million bucks. The banks giving us a couple million bucks. We're putting in 1,000,000, a million and half bucks of our own. And I'm like, okay, so that other five or 700,000 bucks, where does that come? And he goes, Well, we've got friends and investors in the community and we kind of pass the hat kind of thing and collect the difference. And I said okay, and I don't know why, but I said, Well, do you want help with that? And he goes, Well, do you think you can help? I don't know. Maybe. I know a lot of people tell me about the deal and give me something. Let me see what I can do. And so in about 30 or 45 days, we raised the guy five or 700,000 bucks.


Ken Majmudar: [00:26:53] And this was what year?


Jeremy Hill: [00:26:54] This was 2002.


Ken Majmudar: [00:26:56] Also, still really early. Did you benefit from it somehow or he gave you some compensation or something?


Jeremy Hill: [00:27:02] No, didn't ask for it. Like I didn't even know that was a business. And so maybe two or three weeks later, I get a phone call from another builder named Dan and Dan calls and says, Hey, I was talking to Jeff the other day and he said that you helped him with this deal. I'm working on a project. You want to have coffee? Sure, I go meet Dan, we go through this whole deal, so on and so forth, and he says, well, and he's half a million, million bucks shy, and what do you think here? And I'm like, well, here's kind of what we did it for Jeff, and it's going to look like this. And he goes, well do you think you can help raise money? And I said, If I can I'm happy.


Ken Majmudar: [00:27:30] How did you do it for Jeff? You hadn't done it before. So how did you go about figuring out.


Jeremy Hill: [00:27:35] You know, just got on the phone to guys that is that I knew that had money that like real estate or whatever. And just, hey, Ken, I met this guy. Jeff, have you ever met Jeff that so-and-so development. Had coffee with him the other day, good guy. They've been doing this for 20 years. They're working on this project here, and they're about half a million bucks short. They're trying to fill the gap. You want to meet the guy.


Ken Majmudar: [00:27:50] So you're matchmaking. Okay, Gotcha.


Jeremy Hill: [00:27:52] Yeah, you're Chuck Woolery. And so I didn't know what to call it. Didn't know when I met the second developer, he's like, Well, do you think it is you can help with this? Yeah.


Ken Majmudar: [00:28:01] At this point you're still, you're only in your mid-twenties, right.


Jeremy Hill: [00:28:03] Oh yeah. I was 26 seven.


Ken Majmudar: [00:28:06] Okay. So a new guy calls you up, same kind of deal. So how did it turn into what you're doing now?


Jeremy Hill: [00:28:11] Same kind of deal. So we go through the whole thing, and he asked me the question at the end like, okay, so what do you charge? Like up until now, nothing. I'm thinking to myself, okay, well, if a real estate agent charges 3%, maybe. So we charge 3%. He goes 3% on the money. Yeah, that sounds good. Okay, well, do you have an agreement or something you can send over? Sure. Yeah, of course I do. Awesome. I'll get that over to you. So on and so forth. And then I'm leaving. And he goes, Jeremy, what's the name of the company, by the way? Shit, uh it's JB Capital. Me, Jeremy. Jb, It's a JB Capital. He goes I think I've heard of you guys and I was like, Yeah, of course you have shake hands, ha ha, get in the car. So I drive off, jump on the phone with my attorney and I'm like, Hey, Sean, I think I just started a business. And he goes, okay, cool. Tell me about it. And so I kind of tell him what happens and he's like, Dude, do you have any idea what you're doing?


Ken Majmudar: [00:29:00] Yeah, because there's securities laws and things involved. Yeah, yeah.


Jeremy Hill: [00:29:03] Right. Exactly. Have you ever heard of this? You know what the SEC is? I'm like, Well, you know? No.


Ken Majmudar: [00:29:07] Wait, who said this? Your friend?


Jeremy Hill: [00:29:11] This is my attorney.


Ken Majmudar: [00:29:12] Your attorney. Okay, got it, got it, got it.


Jeremy Hill: [00:29:14] And I'm like, look, here's the deal. Here's what it is that we're doing, and I need an agreement today and I need you to go form a company, and it's got to be called JB Capital, because that's what I told this guy. When I say JB Capital kind of started by accident. It kind of started by accident. So that was the end of 2002 to 2003. So fast forward to today, that was nearly $1,000,000,000 of transactions and advisory work since then.


Ken Majmudar: [00:29:40] So you've been doing it continuously since then?


Jeremy Hill: [00:29:43] Yeah, all in this kind of lower middle market debt space.


Ken Majmudar: [00:29:46] Okay. And you started first on the real estate side, so that's one of your two arms.


Jeremy Hill: [00:29:50] Yeah. So from 2000 into 2002, 2003. Then until really kind of oh '09 was 100% real estate focused obviously in kind of the '08 world, the world blew up, capital markets went to crap. Real estate is a direct function to the availability and fluidity of capital markets. So when capital markets are kicking ass, real estate is kicking ass and capital markets aren't, real estate isn't. Did a lot of work from '03 to '08 in that kind of real estate world. There was 18 months from kind of the end of '08 to beginning in '10 to where you didn't know what assets were worth. Everybody was paying their Visa with their MasterCard. You got institutions coming in, buying 25,000 single family houses that they're renting like the world is just a mess. And so in that period of time, my Rolodex changed. And so beforehand it was we, were in this world to where it is that we were serving and advising and raising capital and helping put deals together for smaller builders and developers and investors in real estate. So this was not mom and dad with a hammer that build five houses a year. And this was not Toll Brothers. This was the guys that are building 50 to 250, 50 to 500 units a year.


Jeremy Hill: [00:31:00] They needed something typically more unique than what their local banker can do. And the larger institution in Chicago or New York or whatever it is, it's got $10 billion dollars. They don't give a damn about a $5 million project because it doesn't move the needle. That was the totality of our focus when that market changed was the other side of the coin to that business. It was the banks coming in saying, Jeremy, I know you've been working with these ten developers. Here's the issue. All of that stuff is underwater. We've got a $200 Million nonperforming portfolio made up of 20 builders like this. We don't know where half of the assets are and we don't know what any of it's worth. So now my client has gone from Bob the Builder to Bob the Banker. So I'm now I'm dealing with Bob the Banker going, okay, so tell me about this. What's your position? Where's the leverage ratio? Yeah, you're probably underwater. How do we do this and do we sell assets? Do we sell paper? Do we bring in investors? So on. And so now I'm being forced to think more strategically that I haven't done before, and so I'm learning on the job training.


Ken Majmudar: [00:31:56] At what point did you set up funds?


Jeremy Hill: [00:31:58] We didn't set up our first funds to where we were custody, managing our own assets until October of 2019.


Ken Majmudar: [00:32:03] Oh, so pretty recent. Okay. So up until then, it was a capital raising intermediary.


Jeremy Hill: [00:32:08] Up until then, you're a hired gun, your investment banking capital markets advisory.


Ken Majmudar: [00:32:12] But so then you're working within like a brokerage company. So you got your series 24 and all that kind of stuff. You were doing it in that model?


Jeremy Hill: [00:32:20] Back then, no. No securities. It's all debt.


Ken Majmudar: [00:32:22] Oh, no.


Jeremy Hill: [00:32:23] All debt. All advisory, all debt.


Ken Majmudar: [00:32:24] Oh, it's only debt?


Jeremy Hill: [00:32:26] Yeah, exactly.


Ken Majmudar: [00:32:27] Oh, Always debt. Okay.


Jeremy Hill: [00:32:29] 100%.


Ken Majmudar: [00:32:29] So with debt, you can place debt among people without having?


Jeremy Hill: [00:32:34] Yeah, and it was, it was a fine line for a while. The finder laws were gray and less gray and more defined for how it is that you could operate.


Ken Majmudar: [00:32:42] So what changed then? Why did you flip to a fund model starting at 2019?


Jeremy Hill: [00:32:47] Honestly, I loved the way my business was structured up until 2019. I loved the client aspect of it, the portability of it. I could work from anywhere in the world.


Ken Majmudar: [00:32:57] And it's really just like, Hey, if you find a good deal, you call up a bunch of people. They probably already done deals with you, and then the money moves and then you get a finder's fee, essentially.


Jeremy Hill: [00:33:08] Yeah, exactly. And the business became easier over time. The issues that I started running into was two things. Number one, it was very heavily dependent upon me. Number two, it was not building a business that is that you can scale or sell is what I meant. You weren't building something that you could ultimately monetize. And then three and probably even more so than all of that, the overwhelming frustration was coming because we were all 100% client focused. So I was never on the investor side, always on the borrower side. And the frustrations is that we had was that I started becoming more and more disenchanted with what I was seeing in private equity and private credit, and it was less so from the fluidity and liquidity in those markets and more so and how it is that the managers of those assets were approaching those markets. It was the only thing better than this year's fund is next year's fund. So we've got fund one, fund two, fund 22 fund, whatever it is. And it very quickly from somebody astute would look at this that this is a game to collect assets under management first.


Ken Majmudar: [00:34:10] And not obviously then you have to let the quality of the deal suffer because you're trying to put a lot of money to work is I think implication.


Jeremy Hill: [00:34:17] That's exactly right. And so it's asset management. First, I'm a private equity, private credit, whatever investor. Second, and so I felt like the investors that I knew that were investing in those things were taking a disproportional risk for an academic performance, that the managers were getting rich off of management fees regardless of the performance of the portfolio. And then from the company side, which is who I represented, Joe's software business or whatever, you'd frequently see the terms change at the finish line because they could there's nobody's going to start over diligence.


Ken Majmudar: [00:34:48] Bait and switch, basically.


Jeremy Hill: [00:34:50] Exactly. And then two. A lot of the promises for the wedding night six months later hadn't come true. It hadn't helped me hire a VP of marketing. You hadn't brought in an auditor. You hadn't showed up to a board meeting. It's. Hey, deals done. Spawn some fees. You're in the portfolio. We're trying to get funds six up. Sorry, I don't have time for a board meeting.


Ken Majmudar: [00:35:10] Although maybe it works the other way to where maybe companies also don't perform.


Jeremy Hill: [00:35:13] And that certainly happens. That certainly happens. But for the world that we existed in and continue to exist and these companies that are under $100 Million in revenue, they need handholding, like they need adult supervision. They need an extra adult in the room to help them think through these decisions.


Ken Majmudar: [00:35:30] So how do you guys get around that or do it differently?


Jeremy Hill: [00:35:33] We don't. It's heavy lifting.


Ken Majmudar: [00:35:36] Oh okay. That's why you're saying this is why you like the old model, because you didn't have to worry about that.


Jeremy Hill: [00:35:41] Because we didn't have to do that. But honestly, if funds or corporate credit fund is merchant banking income fund, we've been in Fortune and Reuters and Bloomberg and everywhere else, and our funds have been picked up by all the custodians. We're on Schwab and be it mind everybody else; we've done all of that and that's wonderful. The reality is it should probably be called the Chip on Jeremy Shoulder Fund. Probably not great marketing there, but I felt like there needed to be somebody in a white cowboy hat in this business and my life would be easier not running a fund. But I don't think that it's the right thing to do for investors and for our portfolio companies. I didn't see anybody doing things the right way and serving the investors in the portfolio. And the big thing in my office with all of our people is we eat last.


Ken Majmudar: [00:36:28] So how is your fund structured as far as the fees that investors pay?


Jeremy Hill: [00:36:32] So the only fund in the country that I know of that we don't have a sales load or a charge on the fund, there's no claw back catch up like all of this that I need hieroglyphics and a compass to figure it out. Everybody gets paid. We have no long term lockup, no redemption fee. I don't charge a management fee and we don't use any leverage. All of those normal points of consternation that you have between manager and advisor, they just don't exist here. We create income when income is created. Here's how it is that it's split.


Ken Majmudar: [00:37:00] So how is it split.


Jeremy Hill: [00:37:02] On the fund side of things? And this is, you know I'm sure there's some attorney disclaimer here that this is not an offer for solicitation. Don't send me all your money, read all the stuff you read. So on our corporate credit fund, we pay a 6% preferred return, and then above that 6%, 80% of the interest and 20% of the fee income that's generated or paid back to our investors in monthly distributions. So that over the last whatever 36 months is averaged roughly about 100 basis points per month, pretty consistent, unlevered with no fees. In every deal that is that we do, we are looking for whipped cream capital. I'm looking for some additional opportunity of yield that comes from warrants or profit participation or an exit fee or Domino's coupon or something. Any of that whipped cream income, we split GP LP 50/50. So the goal is to consistently deliver roughly 100 basis points per month.


Ken Majmudar: [00:37:51] That's 12% a year for those who listening, who aren't used to using the basic. So it's a 1% a month to the investor, yeah.


Jeremy Hill: [00:37:58] Yeah, exactly. And then throughout the course of the year, we get these little bumps of whipped cream that come when we exercise our warrants, or we exit a deal and refinance.


Ken Majmudar: [00:38:06] So what does it end up being historically when you count all of it?


Jeremy Hill: [00:38:10] Last year, returns were 1866 to the investor.


Ken Majmudar: [00:38:15] So are you targeting that kind of.


Jeremy Hill: [00:38:18] Well, I mean, we're targeting I'm trying to get to a 14, 14 and a half.


Ken Majmudar: [00:38:21] Got it. Okay.


Jeremy Hill: [00:38:22] Last year was a good year, which is awesome. This year we'll be kind of in that our kind of returns since inception or high 14 eight or something like that, everything's audited. I mean, we're trying to do not only things right, but we're trying to do the right things right.


Ken Majmudar: [00:38:38] And who are your investors? They are individuals, families that are just wealthy.


Jeremy Hill: [00:38:43] Yeah, I mean, it's wealth managers, RA's, single family offices, old rich guys. And then we're now in diligence with seven or eight smaller endowments. CalPERS and some of the large pensions, they don't care about me nor should they? And that's not our customer.


Ken Majmudar: [00:38:58] But you do have some smaller endowments, is what you're saying.


Jeremy Hill: [00:39:00] No, we're in diligence right now. Finally.


Ken Majmudar: [00:39:03] Oh, diligence. Okay.


Jeremy Hill: [00:39:05] We're in diligence right now. Finally, with some smaller university endowments that are not. It's not Harvard.


Ken Majmudar: [00:39:10] No, I understand. I understand. Yeah, sure.


Jeremy Hill: [00:39:12] It's the endowments that is that are 250 million to kind of 2 billion because the larger funds, BlackRock, is not going to call on them because they can't write a $50 million dollar LP check, but they can write a $4 million LP check. Well, that doesn't move the needle, when your last fund's $25 Billion.


Ken Majmudar: [00:39:28] What have you learned that could benefit someone listening who maybe doesn't know all the nuances of the funds and all that kind of stuff about business or entrepreneurship or just generally? Jeremy Hills Wisdom.


Jeremy Hill: [00:39:41] Oh, man. Well, I mean, I think there's a lot to unpack there. I think on the fund side and the finance side, I've definitely become a firm believer of We plan and God laughs. So whatever you're doing and you're listeners, it is that our listening here is that we all have in our mind an idea of how things should be or how things are going to work. I'm going to do this in one, two, three paint by numbers. It's going to end up this way. Sounds good. But oftentimes your journey or my journey or your listeners journey, it doesn't always work like that. And I think the thing that people need to understand is that's okay. The value and the teaching there is that we all want to figure out a way to be committed but not attached. So I'm committed to the end result. I'm just not attached to the process. Before we were in this COVID world and you work downtown or you work to wherever it is to work. When I was working downtown, I was always committed to coming home at the end of the day. I just wasn't attached to taking the freeway because if there's an accident or there's too much traffic or there's one thing, I'll just get off and take the back roads. I'm still going home, still want to go see my wife and my kids, but I don't really, don't care if I take the freeway. I'd like to, but it's not whatever. It's the same thing in your business. I know where it is that I'm going and I think I'm going to go this way. But if there's an accident or traffic or something changes, then I'm going to pivot and go around or take the back roads or do whatever.


Jeremy Hill: [00:40:58] But I'm still going home. I'm still getting there. And I think for your listeners and for yourself and for myself, that reminder of being committed but not attached is critical. I think that's one. The other thing it is that I've found is that there is nothing in my own mind, there is nothing in this world that was created for somebody else that's not created for you. There's nothing that says it is that, well, this is okay for Ken, but Jeremy, nah, Ken's different. God didn't treat you any different than He created me. If you can do it, I can do it. I may just have to work harder than you. I wish that I would have started our phones earlier. For me personally, maybe it was. I didn't have the confidence at the time to say, screw you, I can do this. Maybe I needed to continue to get to more experience. It is in my own mind to feel like I was confident enough to do this or whatever, or I needed to have enough frustration that says, Forget it, these guys are dumb asses. There's got to be a different way. I don't know. But I think a lot of times a lot of us give other people that we look at maybe more credit than they deserve. And in the same breath, we discount our abilities. Like, I'm not going to be LeBron. I'm not six, eight and 280 pounds and can run and dunk and all that. Like, I can practice my ass off. I'm not going to be that. You know.


Ken Majmudar: [00:42:08] Right. Absolutely. We have some natural abilities here that can be improved within our range, but we can't become Michael Jordan.


Jeremy Hill: [00:42:15] Exactly. So, I mean, there's certain little asterisks to this like that. But the reality is, is that we discount our ability to do stuff. We don't give ourselves enough credit. We think that something that somebody exceptional has done is God. They must just be unbelievable. What we don't see is that that person did 1000 meetings to where the other guy laughed at them. That guy flew across the country.


Ken Majmudar: [00:42:40] So some of it, it's like work. You're saying they outworked?


Jeremy Hill: [00:42:43] Yeah. They got to go across the country. It is for a meeting that nobody showed up to. The guy fought with his wife last night, just like you fought with your wife. You know that stuff? You just think, oh, man, he's on the cover of the newspaper. He must be awesome.


Ken Majmudar: [00:42:54] Yeah. And initially, obviously, you didn't want to be in Seattle, but you've clearly been in Seattle a long time. So before we end the show, I'd like to get what's your new take on to your 20 years later take on Seattle and tell us. Yeah, because I like a little bit of that geographical flavor also to bring in. And I've been to Seattle obviously a number of times, but obviously I think the city has grown and changed and we've all got some real international multinational champions like Amazon, Boeing. I guess technically Boeing moved to Chicago, but it's still a Seattle company. Obviously, Microsoft are three immediately that come to mind. But tell us about what's happened in Seattle over that period of time, the last couple of decades. What's it like there now?


Jeremy Hill: [00:43:34] Seattle is a city that now again, it's perspective.


Ken Majmudar: [00:43:39] Yeah, absolutely. This is Jeremy Hill's perspective on Seattle.


Jeremy Hill: [00:43:43] So Seattle, I feel like, has lost its way over the last ten years or so. Everybody knows historically Seattle has the moniker of the Emerald City.


Ken Majmudar: [00:43:52] I don't know that. I don't know what that means.


Jeremy Hill: [00:43:54] It's always been called the Emerald City. Seattle is beautiful. Over the last several years, the drug problem and the homeless problem has kind of taken over. And so we're experiencing a lot of the same things that is that you're seeing in Portland and San Francisco.


Ken Majmudar: [00:44:09] Well, I mean I read about that with the prosecutors that got recalled recently, you know for example, because it was a very permissive kind of.


Jeremy Hill: [00:44:16] Yeah, agreed. So we're seeing a lot of that here, which is unfortunate.


Ken Majmudar: [00:44:20] And voters who saw that, I think obviously at least in San Francisco, we're kind of like, hey, you know, we're not okay with some of this pulling back.


Jeremy Hill: [00:44:27] Yeah, hope so. I think Seattle starting to come back a little bit. But for the people that is that I know that either live or work downtown, downtown's a ghost town. There's like two restaurants open for lunch.


Ken Majmudar: [00:44:38] Really? Wow. That's shocking.


Jeremy Hill: [00:44:39] I mean, there's little cafes like that. So those two restaurants, Capital Grille and Purple Cafe, are kicking ass. They're always busy for lunch because whoever's downtown, that's where you go to lunch because there is no place else to go to lunch. Seattle is. We've got big employment bases here, obviously, Microsoft, Amazon, Eddie Bauer, REI, Nordstrom, Boeing, there's a lot. Then you have companies, you've got DocuSign is here, you've got Tableau Software is here. You've got a big biotech is here.


Ken Majmudar: [00:45:07] A lot of venture capital probably also.


Jeremy Hill: [00:45:09] There is our venture capital community, and this is shitty to say, but our venture capital community here is a junior varsity team on their best day.


Ken Majmudar: [00:45:17] All right. Because there's a couple of firms I think one starts with "M" that's like well known.


Jeremy Hill: [00:45:23] There's Madrona here.


Ken Majmudar: [00:45:24] Madrona. That's the one. Yeah.


Jeremy Hill: [00:45:26] Madrona, will be the longest legacy. And Madrona. Matt and the team there. Good guys, smart guys, great reputation. People love them, but they are. Madrona is maybe a little bit of the exception, but a lot of these guys follow. I mean, if we look at the economics for where it is that venture capital funding has come, we've seen Boston, Austin and New York dramatically either catch up and probably eclipse Seattle. And so Seattle, I think, is a great place for innovation. But the majority of people it is that are growing businesses in Seattle get their money from outside Seattle, which is a big frustration for me.


Ken Majmudar: [00:46:00] a lot of people don't even know it, I heard this. Jeff Bezos was actually a financial guy at D.E Shaw in New York, and I think he kind of packed up his stuff and drove cross country to go to Seattle.


Jeremy Hill: [00:46:12] Yeah, wrote his business plan and his Honda Accord.


Ken Majmudar: [00:46:15] I think partly because there was like a book distributor that was there. But also I would assume that maybe he's a very smart guy. Washington State is one of the states with no state income tax. So maybe that was in the back of his mind.


Jeremy Hill: [00:46:26] Well, what's interesting so politicians have just now changed that so we don't have income tax, but they just passed a capital gains tax. We're trying to, again, as we're changing the definitions of things. Evidently, capital gains tax is not income tax in Washington.


Ken Majmudar: [00:46:42] Well, but yeah, you're not taxed on earned income then, I guess your taxed on gains. So it's half of the enchilada, at least for certain people. Yeah. Also, the reputation of Washington is always overcast and gloomy. Is that you find that to be true?


Jeremy Hill: [00:46:57] Yeah, definitely true. And so we're experiencing in the summer now. So summer in Seattle is tough to beat because it genuinely is an absolutely gorgeous place. But you get summer for ten weeks, eight weeks. It does rain a lot, it's gray a lot. And my wife and I have been here for a long, long time and have found over the last dozen years that in my own experience, the only way that you can stay and live in Seattle and be happy is to leave four or five times a year and go find some sunshine.


Ken Majmudar: [00:47:25] Okay. What's made it such a place for these big iconic companies to come out of? Is there something there in the water?


Jeremy Hill: [00:47:31] A lot of that you have the effect of Microsoft and Amazon that employment base as it grows. You have people leave Microsoft or Amazon that go start a company that comes back in to serve that ecosystem of Microsoft that ends up growing. And so you have Tableau and DocuSign and there's a bunch of around here that have become we have 25 or so companies here in the northwest that are north of $1,000,000,000 valuation or have raised three or four or $500 million, but all their money doesn't come from Seattle. It comes from somewhere else. But we've got a great burgeoning tech and innovation community here, which is awesome. We are probably half the cost of living of San Francisco.


Ken Majmudar: [00:48:11] Oh, even still today?


Jeremy Hill: [00:48:13] Probably. Even though we've gone up now, I don't know, post-pandemic what the numbers are. And remember, before you pay 7500, 8500 bucks a month for a one-bedroom apartment in San Francisco that you'd want to live in. And so that's not the case here. It's certainly gone up. But I think you can get a nice one-bedroom apartment downtown Seattle for 3500 bucks, which is still a gob smack of money. But relatively speaking, I think you have jobs and talent here. It's more affordable than LA, San Francisco, New York or Chicago. I think that's driven a bunch of it. No income tax is great, although that's changing if you're an outdoor Z tech person skiing, mountain biking, fishing, being on the water.


Ken Majmudar: [00:48:53] Oh yeah. It's probably fairly comparable in terms of, yeah, from that point of view.


Jeremy Hill: [00:48:57] Oh, it's awesome. Yeah


Ken Majmudar: [00:48:59] I guess the last piece I'd love to end with interest rates have gone up recently. There's a recession coming or maybe here already. What's your outlook for the next short term and long term? How are you positioning? What are you thinking about?


Jeremy Hill: [00:49:13] I mean, from our business standpoint, as crummy as it is to say, a rise in interest rates only makes my business better. I certainly don't want to say I hope Jerome Powell increases it another 300 basis points. I definitely don't want that. But the rise in interest rates makes our business better and more attractive, both from a borrower and from an investor standpoint. From a macro standpoint on the economy, the things it is that we're concerned about or that we're at least kind of talking to companies and thinking about are two things. I think we are going into a period of time to where the world is going to be harder for the next year or two, maybe for all of us in our businesses. The two things it is that you have to focus on. You going to mind every frickin penny. You need to pay attention to where it is that you're spending money. Why it is that you're spending money. On and on and on and on and on. Mind your dollars personally and professionally. The other thing is just for your business, you better figure out a way to market like a son of a bitch. You better be innovative. You better tell your story fantastically. You better do things. Invest in marketing because there is going to be a clearing of the debt over the next 12 months. If you are minding your finances and you are marketing and telling stories, you're going to find yourself as a giant a year from now. Because if you had 20 competitors, now you've got four. And so that I think is right now sage council.


Ken Majmudar: [00:50:30] Actually, one last thing I want to mention. Your LinkedIn is pretty interesting. You have a lot of interesting posts and I think we connected over one of them. I think what's something about entrepreneurship.


Jeremy Hill: [00:50:42] You and I connected because I posted I didn't go to Harvard, but I've paid for a deal or two or Goldman would never hire me.


Ken Majmudar: [00:50:49] Oh, that was the post. Right. And I actually said I did go to Harvard but still blah, blah, blah. That's right. That's right. Like your insights were right from the perspective of somebody who actually did go to Harvard. So yeah. So tell us just about and I would say like you're in the same generation as me, we're not the guys creating generally a lot of social media. I'm probably similarly active now on LinkedIn with the help of a couple of people that I've been lucky enough to work with. So your strike me is kind of similar, very substantive, kind of interesting perspectives. So how do you do that? When did you start that? How did you figure out how to do that? What have you learned about posting on social media?


Jeremy Hill: [00:51:26] Yeah, I mean, I'm sure I haven't learned enough for all of us, for our businesses. Radio became the TV, the TV became the Internet. The Internet's becoming kind of social media for how you're telling your story and communicating with your audience. Whether your audience is a brand, whether it's customers, whether it's investors, whether it's people to buy your tennis shoes or potato chips. For us in our business, for me, my audience define that as you will. My audience is not on Facebook. Facebook is for my wife and seeing my friend's kids grow up and stuff like that, which is neat. Our audience from a professional standpoint is LinkedIn, and so one of my partners is Gary Vee story for another time, but we work directly with them on kind of every week, every other week basis.


Ken Majmudar: [00:52:05] Oh okay, like he's a coach?


Jeremy Hill: [00:52:07] For a lot of our portfolio companies, right? Like they can map out digital strategies for each of our portfolio companies.


Ken Majmudar: [00:52:12] So his company Vagner.


Jeremy Hill: [00:52:14] Yeah, Vagner and Sasha. And so the value there that has come from us is being able to see them and how it is that they're adapting strategies for companies and brands to be able to tell their story. Well, we're doing that to help our portfolio companies or companies that we're investing in. I'm listening and learning in our business, from a professional side, LinkedIn is definitely the most underutilized tool for professional to be able to use, and so we're doing our best to make sure it is that we're communicating, providing thought leadership, and then giving my perspective and my perspective, especially coming in the financial services space and management space. My perspective is certainly atypical from the Harvard B-school grad, five years on Wall Street and ten years on, Wall Street now runs XYZ firm. Mine is not that. Sometimes that's refreshing. Sometimes that's merely entertainment. But some people really like it, and we just have a different perspective that hopefully we share and provides value.


Ken Majmudar: [00:53:13] Yeah, that's awesome. Well, thank you for taking the time. It's been a pleasure to have you.


Jeremy Hill: [00:53:18] Dude, I had so much fun. Thank you so much for the conversation. I really appreciate you having me.


Ken Majmudar: [00:53:23] I really enjoyed speaking to Jeremy today. Some of my biggest takeaways from this conversation are knowing the value of personal connections and how to make such connections in an otherwise disconnected world and society. Ironically, as we touched on in the conversation, technology which has connected us more than ever before, is also leading to profound feelings of disconnection and loneliness, as well as anxiety and other disorders. While this is true, it's also ironic that it's also a force for good, because if it wasn't for LinkedIn, I may not have ever had the opportunity to connect with Jeremy at all because this face-to-face conversation over Zoom with him being on the West Coast and me on the East Coast was originally teed up when he reached out to me through my LinkedIn account. I also encourage you to read the book mentioned in this show, a book called Lost Connections by Johann Hari, who I had the pleasure to meet at my last TED conference that I attended in Edinburgh, Scotland. Until next time. Thanks for listening.


Narrator: [00:54:28] Thank you for listening to this episode of Compound Ideas, hosted by Ken Majumdar of Ridgewood Investments. Connect with Ken. Learn more about the show and never miss an episode at compoundideasshow.com.


Narrator: [00:54:47] Ken Majumdar is the founder of Richwood Investments and several other affiliated companies. All opinions expressed by Ken and podcast guests are solely their own opinions and do not reflect the opinion of Ridgewood Investments or any of its affiliates. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Ridgewood Investments and its affiliates may maintain positions in the securities discussed in this podcast.